Broadpoint Gleacher Securities Group, Western Refining, Nextwave Wireless, and Force Protection may be a trader's best near-term friends.
Though the broad market has retreated a bit after reaching new highs for the year on Monday, a handful of stocks appear to be building some momentum rather than giving it up. Force Protection Inc. (NASDAQ:FRPT), Western Refining Inc. (NYSE:WNR), Nextwave Wireless Inc. (OTC:WAVE), and Broadpoint Gleacher Securities Group, Inc. (BPSG) may well be gearing up for major upside moves. Here's a technical look at each chart.
July was pretty brutal for Nextwave Wireless Inc. (WAVE), sinking from a high of 51.8 cents top a low of 30 cents just a few days ago. The same day that WAVE hit that multi-week low though, we also witnessed a major outside day reversal... a bullish one. Since then, the bulls have made good on the hint.
The key clue here is higher lows since that August 14th bar. Though Nextwave Wireless have yet to top the 15th's high of 38 cents, today's high-volume rally suggests the buyers are going to take that swing.
There's something of a ceiling at 51 cents, though dumping all of a position then might cut off a good trade too early. Longer, term WAVE may not hit a major hurdle until above 80 cents.
Note that the company's results - current or projected - don't suggest Nextwave is a solid long-term holding yet; this is strictly a trade. The demise of the wireless stocks was discussed on August 6th.
Of the four charts under scrutiny today, Broadpoint Gleacher Securities Group, Inc. (BPSG) may be the most difficulty to get behind. The recent (four week) pattern is ideal.... a slow, bowl-shaped swing from downside to upside momentum is a great start to more gains. The problem lies in the 200% gain made during the prior four months.
Can BPSG actually keep trekking into new-high territory? Yes, it can - stranger things have happened. That doesn't mean it will happen.... just that it shouldn't be ruled out.
See, from a valuation perspective, Broadpoint Gleacher Securities are fairly valued. The trailing twelve month P/E is a frothy 36.9, but the forward-looking P/E is only 20.00. Factor in that Broadpoint Gleacher has topped analyst estimates - considerably - over the last two quarters, and one has to wonder if 20.00 is too conservative of an estimate.
There is no meaningful target price, though a stop of $5.96 (this month's low) makes sense.
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This is the third Small Cap Network mention of Force Protection Inc. (FRPT) in the last couple of weeks, though ach one has been merited for the same reason.... FRPT is making good on the rebound effort inspired by a drastic plunge from six weeks ago.
Volume still hasn't picked up enough to get Force Protection shares over the hump around $5.50, though the buying volume hasn't exactly been weak either.
As of our last look at FRPT, the company was still trying to shrug off a painful Q2, though as we pointed out, the weak numbers weren't weak... the comparables from a year earlier were near impossible to even come close to matching. In the meantime, the projected (and plausible) 20% growth rate expected of the company has continued to attract investors.
The target is the same; the gap's full closure should push Force Protection shares up to $8.80.
While it's something of a misconception that an economic recovery will carry every oil and energy stock higher, odds are good that Western Refining Inc. (WNR) will be one of the first and biggest beneficiaries of ongoing economic strengthening.
One of the best things Western Refining shares have going for them is the beating they took for the better part of this year. Granted, it was probably deserved after Q4's swing to a GAAP loss and Q2's loss of 11 cents per share.
The future looks better than the past though... the company is expected to earn 68 cents per share this year, and 77 cents next year. By the way, Western Refining has beat estimates in all four of its late four quarters.
As for WNR in the meantime, the price/volume action over the last two days hints of a breakout effort. The big hurdle is at $7.20/$7.30 though. If it's crossed, Western Refining shares could really start to roll. A revisit to $12.40 isn't out of the question, though it would be a stretch.
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